[ Page 3215 ]

CONTENTS

Routine proceedings

Committee of Supply: Department of Municipal Affairs estimates.

On vote 142.                                           Mr. Wallace — 3223
            Hon. Mr. Curtis — 3215            Mrs. Dailly — 3227

            Mr. Nicolson — 3215                Mr. Barber — 3227

            Mr. Barber — 3215                    Hon. Mr. Curtis — 3230

            Hon. Mr. Curtis — 3216            Mr. Skelly — 3231

            Mr. Barber — 3216                     Hon. Mr. Curtis — 3232

            Mrs. Wallace — 3217         On vote 147.

            Hon. Mr. Curtis — 3217             Mr. Barber — 3232

            Mr. Gibson — 3218                    Hon. Mr. Curtis — 3232

            Mr. Nicolson — 3220                 Mr. Wallace — 3232

            Hon. Mr. Curtis — 3221             Hon. Mr. Curtis — 3232

Department of Housing estimates.

On vote 108.                                           On vote 109.

Mr. Wallace — 3233                           Mr. Wallace — 3233

Hon. Mr. Curtis — 3233                      Hon. Mr. Curtis — 3233

Department of Transport and Communications estimates.

On vote 198.                                                  Mr. Macdonald — 3238

Mr. Macdonald — 3234                       Mr. Gibson — 3238

The House met at 10 a.m.

Prayers.

Orders of the day.

The House in Committee of Supply; Mr. Schroeder in the chair.

ESTIMATES: DEPARTMENT

OF MUNICIPAL AFFAIRS

On vote 142: minister's office, $81,506.

HON. H.A. CURTIS (Minister of Municipal Affairs): Mr. Chairman, although it is late in the session I look forward to discussing the estimates of the Department of Municipal Affairs and the Department of Housing. As the House Leader (Hon. Mr. Gardom) has pointed out, my salary is contained under Municipal Affairs. I assume that the Chair will allow a degree of latitude in terms of discussing the two departments as they wish. I have a number of remarks prepared, but perhaps I will have an opportunity to touch on these in the course of the debate on the various votes.

I would like, Mr. Chairman, to introduce — although they have been in the House previously — the two deputies of the Department of Housing. To my immediate right is Mr. Larry Bell, who succeeded Gary Begg, who left the department a number of weeks ago; behind him is the Deputy Minister of Municipal Affairs, Mr. Bill Long.

MR. CHAIRMAN: In order to determine what is relevant debate in this, has it been determined whether or not only the Department of Municipal Affairs shall be discussed under this vote, or is the Department of Housing included?

HON. MR. CURTIS: Mr. Chairman, it is at the pleasure of the Chair and the committee. The House Leader, I believe, called vote 142, which is minister's office, Department of Municipal Affairs. It is under that vote that I am paid my salary. It is at the pleasure of the committee.

MR. L. NICOLSON (Nelson-Creston): No, let's do both of them. It would just lengthen things.

MR. CHAIRMAN: The Chair is waiting to be guided.

MR. NICOLSON: Mr. Chairman, I think we could probably expedite matters if we were actually to do both. The minister nods his head in agreement. We feel that we could probably keep things fairly specific. We might go back and forth a little bit, but we'll probably get through it a little bit quicker, if the Chair is willing.

MR. CHAIRMAN: Then both the Minister of Municipal Affairs and Minister of Housing. General administration under vote 142.

MR. NICOLSON: Mr. Chairman, I'd like to start off by asking for some information about commitments from the federal government under various sections and programmes of the National Housing Act. Perhaps the minister has information which he might be able to distribute to members.

I would be interested in knowing what commitments they have this year under section 15 for non-profit housing cooperatives and senior citizens' Housing under the Elderly Citizens Housing Aid Act. Also, what budget has CMHA set for AHOP for British Columbia, for neighbourhood improvement programmes, and in general all programmes — one or two of which I might have left out?

MR. C. BARBER (Victoria): Would the minister prefer to answer each of these questions specifically, or would he rather take them in groups?

Interjection.

MR. BARBER: Then referring at the moment to the housing component of your ministry, I should like to speak briefly to a subject of continuing contention in Victoria, which is the Mount Stephen proposal. The minister has now received representations from the city council of Victoria, the Victoria Labour Council is in the process of making representations, and three cooperative organizations are now considering proposals at the Mount Stephen property site.

I wonder if the minister would be willing to make a commitment to the House than he will suspend the proposed sale of the Mount Stephen properties to private interests until public cooperatives — or quasi-public, as in the case of other cooperatives — have an opportunity to consider the proposal call which was, as the minister conceded, published inadvertently, in order to give them more time to prepare a serious proposal. So I should first of all, regarding the Mount Stephen proposal, like to know whether or not the minister will suspend temporarily the proposal call in order to give them more time.

Secondly, if the minister is agreeable to that, in order that other public-interest groups rather than private developers might have an opportunity to make a serious proposal for the site, could he give a commitment to this House that if it should go to a

[ Page 3216 ]

public-interest group, the cost of the land will be the original price paid by the province, which was $190,000 — for the sake of convenience, $200,000 — rather than the $600,000 proposed in the proposal call that appeared in the Vancouver Journal of Commerce on June 7?

I should like to repeat my questions, as the minister is consulting. Will he be prepared to delay or suspend for the time being the proposal call programme for the Mount Stephen site? Secondly, if it should be determined by the department that it might go to a public interest group, could the minister also tell this House that he would be willing to sell or transfer the land at, in effect, the original price of, shall we say, $200,000, rather than at the inflated price of $600,000 for private development purposes?

HON. MR. CURTIS: Mr. Chairman, dealing with the specific question from the hon. second member for Victoria with respect to Mount Stephen, I'm not sure that I am in a position today to give all the commitments that the hon. member seeks.

I would point out, however, Mr. Chairman, that the correspondence from the mayor of the city of Victoria...and I emphasize the point that it is correspondence from the mayor, not from the clerk representing the opinion of the mayor and council. There was a letter on June 16 from Mayor Young of Victoria which traced the history of Mount Stephen as far as the city was concerned, or certainly as far as that mayor was concerned. I realize I can't table documents in committee, but the second paragraph of page 2 I quote for the member: "We quite agree it would be absurd for the province to sell the land in question to a private developer for less than the current market price and we're not suggesting such action." The letter goes on to indicate that really there's nothing wrong with the increased price. I take issue with the hon. member in use of the words "inflated price" — inflated would suggest that we plucked the figure out of the air. This is the approximate value of the land now and I think that can be supported very well. The mayor in his letter of June 16 indicates that the increased price would be okay as long as the increase itself accrues to the city of Victoria for offsite servicing costs.

I would hope that we would be able to continue to work, Mr. Chairman, as closely as possible with the city of Victoria in resolving this particular problem. It has been of some interest and concern, particularly to the second member for Victoria.

I can't really undertake to suspend the proposal call which is not yet launched. Yes, an advertisement did appear inadvertently and as the minister responsible, I spoke with my deputy and the corrective action has been taken there. The individual in the department who permitted the ad to slip through was told that this is not to happen again because, frankly, the deputy minister and I had not had a chance to finally resolve all the outstanding points on the proposal call. The ad was in draft form — fair enough — but it went from there on.

I would hope that we receive a good number of submissions for this particular piece of property from so-called private developers. We shouldn't lose sight of the fact that it's going to be housing for people — no matter who eventually builds on that site.

Regarding the public-interest group, I can't give the precise undertaking the member seeks, nor would I at this point, but I would remind the member that we've also indicated to even the Mount Stephen Co-op Society that they're most welcome to submit a proposal once we're ready to receive them. A number of details will have to be worked out with the city of Victoria.

The member for Nelson-Creston (Mr. Nicolson), the former Minister of Housing, asked for some figures. Federal commitments was the precise question. Section 15 provides $43 million — that's senior citizens and municipal non-profit housing; section 43, $38 million — public housing, family; AHOP — a commitment for approximately 4,000 units; ARP — a commitment for 4,000 units; rural and remote — 400 units; the NIP programme — $10 million; and section 42 — land servicing, $12 million.

I think that it would be helpful to the committee, Mr. Chairman, if I could just refer to one point with respect to ARP — the assisted rental programme. At this point in time, and recognizing difficulties in the construction industry which are apparently just around the corner, we are extremely encouraged by the response to the assisted rental programme. This is designed to encourage those interested in the creation of rental housing. It has met with, I think it is correct to say, early, overwhelming success. CMHC has assumed, as the member for Nelson-Creston would know, the principal administrative responsibility. The response has been so great that approximately two weeks ago we had an urgent call from CMHC asking for additional staff. We have had to second six staff members from the provincial Department of Housing to CMHC to assist them in the processing of applications. It is most unfortunate that we appear to be entering a period of difficulty in the construction industry, but that notwithstanding, I believe we're going to see a great many rental units constructed in British Columbia within the next 10 to 12 to 15 months.

MR. BARBER: Mr. Chairman, I rise to speak about a crisis that is going to occur this September and that has occurred every September for the last many years. That is the crisis of student housing, a crisis which, as the minister knows, has been a problem for governments for many years. I wish to

[ Page 3217 ]

find out from the minister what kind of leadership he's willing to exercise in the provision of student housing.

I'd like to point out as well that in Canada the universities located in British Columbia have the dubious honour of being among the worst-provided-for of any in this country. To my recollection, when I spoke on this matter earlier, the University of Victoria, Simon Fraser University and the University of British Columbia rank within the losing 20 out of 30 universities in Canada when it comes to the provision per student population of accommodation on campus or, indeed, closely off campus.

Last year the student union of the University of Victoria was compelled to put up tents, to attempt to secure mobile homes, to attempt to find placements for students in classrooms and other dormitory facilities. This year the problem is going to be the same. I've been in considerable discussion with representatives of the Alma Mater Society and with the administration of the University of Victoria, and they inform me that they are expecting an increase in student enrolment this year; they inform me as well that similar increases have been anticipated at Simon Fraser and at the University of British Columbia.

I'd like to know generally, Mr. Chairman, what the minister's policy is toward the provision of student housing on and off campus, whether or not he's willing to undertake any kind of emergency programme which will assist in the provision of housing which will be required this September, and what the future is, as far as his department is concerned, for arrangements under the Act — and I realize it's not permitted generally to refer to it, the Educational Institutions Capital Financing Authority. I'd like to know whether or not there is a connection, whether or not there is liaison there, whether or not planning is going on, and generally what the minister's position is on the whole question of student housing. It's a very important issue to many of my constituents, some 6,000 of whom will be attending University of Victoria this year. It's a very important question to other of our constituents, on both sides of the House. I should like to hear from the Minister of Housing what his response will be.

MRS. B.B. WALLACE (Cowichan-Malahat): Mr. Chairman, true to type I wish to speak just briefly to the minister regarding the taxation policy on farmland. As he is no doubt aware, farm buildings are taxable in excess of some $5,000 under the Municipal Act. There is no exemption apart from the $1,000 for school tax which has been there for aeons, with no change.

It would seem that there is, at least in my opinion, quite a detrimental effect to the farm community from this approach to taxation. The average worker, of course, is not faced with tax on land or on the means of producing his livelihood. He is taxed only on his home.

I am sure the minister is familiar with the brief which was presented by the B.C. Federation of Agriculture to the commission of inquiry on property assessment. I think that, really, there is a lot of accord in the House and in the province generally on this particular thing, but the crux has been how you define actively used farmland and how you define a bona fide farmer. I would suggest that the B.C. Federation of Agriculture has come up with some very good suggestions in this brief which outlines — I won't take the time to go into them in too great detail — agricultural land and what would constitute farmland under active production. They also go into several requirements to classify a bona fide farmer, and indicate that perhaps three out of the four or so of those criteria would be acceptable to put a farmer in this classification.

My question to the minister is: is he considering taking some sort of action to alleviate the tax load on the farmer in the immediate future?

HON. MR. CURTIS: Mr. Chairman, briefly answering the hon. member for Cowichan-Malahat, yes, I am familiar with the brief from the B.C. Federation of Agriculture on this topic. I was fortunate enough to be able to travel, while in opposition, with the agriculture committee, an all-party committee, and also, as you might expect, the municipal affairs committee. So I have available to me and was exposed to considerable material relating to the whole question of property taxation.

I think the B.C. Federation of Agriculture brief in this regard was a very thoughtful document. There is a problem, Madam Member, through you, Mr. Chairman, with respect to what is genuine, bona fide farm as opposed to a hobby farm or land which is just held because it's nice to go there once in a while.

MRS. WALLACE: That's been a problem.

HON. MR. CURTIS: It's been quite a problem.

I think the correct statement at this point would be to remind the committee, Mr. Chairman, that the hon. Provincial Secretary (Hon. Mrs. McCarthy) notified the taxation and assessment commission of inquiry a few weeks ago that the government expected their report by the end of July. I don't think we should anticipate what that report will say on the whole question of property taxation and the raising of revenues for local government and, to a very lesser extent, for the province. I hope that the commission addresses itself to a number of specific areas including this one. Then through the course of the balance of the year it will be the responsibility of the executive council to assess — I suppose it will be

[ Page 3218 ]

my responsibility in partnership with the Minister of Finance — and then the responsibility of the executive council or a committee of cabinet to review all the points that have been made and determine where the very major inequities are to be found.

Therefore it is not possible for me today to enunciate a taxation policy on farmland, as much as I would like to, because it would be nice to have that one out of the way, frankly. But it is simply not possible.

With respect to the later comments by the hon. second member for Victoria (Mr. Barber) on student housing. Yes, I am aware of the problem; you would expect me to be very much aware of it. As a native of the greater Victoria area, particularly with the growth of the University of Victoria, I have become increasingly aware of the problem. The member will know that CMHC has just backed right away from it. They are out of the field completely, and that is unfortunate.

In the slightly longer run — that is, other than September of this year.... I spoke, I think, with understandable enthusiasm a few moments ago about the interest in the ARP, the assisted rental programme. We certainly believe that this is a way in the longer term to easing the student housing crisis. Because it follows that if more rental units are built — if the vacancy rate increases from its virtually zilch figure at the moment — then there will be more competition in rental housing and students will be able to take advantage of that.

With respect to this September, quite frankly, Mr. Member, through you, Mr. Chairman, no, I have not addressed myself to that crisis. We have had a fairly active six months, as the member would recognize. That is not to in any way place the problem in a corner or just sort of forget about it. But, frankly, I have not had an opportunity with my senior staff in Housing to address myself to the problem this September.

MR. G.F. GIBSON (North Vancouver-Capilano): This is a very important minister and a very important portfolio. We are having our own little Habitat conference here this morning, as it applies to British Columbia. Mr. Chairman, I'll just touch over some important subjects very briefly and hope that the minister could give us a bit of information on them.

First of all, as the minister knows, I am a great supporter of the ferry system that's soon going to be operating across Burrard Inlet. I think it has an enormous capacity to clear up congestion and absorb growth currently afflicting the Lions Gate Bridge and the Second Narrows Bridge — there are some 1,500 persons per hour at peak periods when it is up and running in a satisfactory way. I would be grateful if the minister could tell us a little bit about how that is coming along, when in the fall we might expect it to start and progress in planning for transit connections up and down Lonsdale, because this is tremendously important for the operation of the system. I would also be grateful to know anything he could tell us about transit connections at the south end. I appreciate that the bus network is better developed at the south end; nevertheless, there will have to be some amendments, I would think.

In the same connection, I would like to express appreciation through him to his departmental officials for the way they have cooperated with the city of North Vancouver in terms of giving them access to planning for the property. My understanding is that the question is more or less laying on the table now and maturing while people have a chance to get their thoughts together on it, and to also express appreciation for the way particularly Mr. Spratt of the transit bureau cooperated with the people who were being displaced in terms of moorage by the incoming ferry terminal arrangements.

The next subject I would like to raise is the most important subject, I think, to the minister in his portfolio, at least the one that causes him all the problems, and that's the question of growth in the urban areas of British Columbia. As we all know, the long-term trend has been something around 3 per cent, which is an extraordinarily high rate of growth — it doubles every 22 or 23 years.

The first question I would ask him is: what new internal mechanisms has the new government developed to deal with the overall problem of growth? It's a multi-departmental question, but somewhere there has to be a lead department, I would ask the minister whether that is his department, as I would hope that it would be. What cabinet committee is seized of the problem? What internal mechanism is the government developing?

As new people come to our province, it's important for them, and important for those of us already here, that their new residences and their new jobs should be in places which are both congenial to live in and economic to live in. There must be some kind of analogue on a provincewide basis to the livable-region plan that the GVRD brought up in Vancouver. I think the minister is on record as being much in favour of that concept of the livable-region plan. I'd like to ask him, or to suggest to him, that that "livable-province plan" should be developed. As I say, it would seem sensible to me that his department should take the lead in that development.

Even within the existing planning there are many things that the government can be doing to implement the philosophy of the livable-region plan in the GVRD, for example. One of the important suggestions that the plan makes relates to the distribution of employment around the Greater

[ Page 3219 ]

Victoria Regional District and the hope that, in general, it will be possible to locate employment closer to jobs.

One of the major employers in the lower mainland is the provincial government. I would welcome any news the minister could give us as to the siting of the provincial government offices in various areas of the lower mainland. For example, I have long been interested, and my constituents have been interested, to know whether or not there is a possibility of the British Columbia Railway head office being located at the southern terminus in Vancouver; alternately, the minister and the government may have thoughts that it would be located in Prince George. It would make an argument either way. But my point is that it is important that the government address these particular questions.

The next overall issue I would raise is that of transit planning. We have some apparent insight into the thoughts of the government in terms of a column which appeared in The Vancouver Sun on June 23 this year, written by Harvey Oberfeld, which apparently deals from a leaked document of some kind — a staff report of the GVRD claiming that the government has in mind the creation of something called an urban transit authority which, according to the report, would deal with urban transportation problems all over the province of British Columbia. The report goes on to suggest that GVRD people feel that there's a special regional transportation problem in the GVRD and there should be a separate authority to deal with that largest, single transportation question in the province. To me this makes good sense, Mr. Chairman, because presumably on any transportation authority, regional representation will be looked for.

The distinct problems of the GVRD are such that it should have a large regional representation. People from Prince George or Kamloops or Prince Rupert on a general provincial urban transportation authority, in dealing with GVRD questions, would be dealing with questions very different from those of their own communities. The matter of scale is important in things like transportation, and it would seem to me a useful suggestion to have one general urban transportation authority and another separate and distinct body to deal with the particular problems of the GVRD.

The same report gave us to understand that the GVRD, at the staff level, favoured what they call the Ontario financial formula in the distribution of costs, which is to say 75 per cent provincial and 25 per cent local as to capital and a split on the operating costs. I'd be grateful if the minister could tell us his thinking on that particular line. What does he consider to be the appropriate local levels? I think that as a matter of public policy we must accept the fact that there is and there will continue to be substantial deficits in a narrow cost-accounting basis on the public transportation system. But, Mr. Chairman, these deficits are by no means real when looked at in the overall, when looked at in terms of the money not spent on parking lots, on gasoline, on rubber tires, on freeways, roads, bridges of all kinds.

Urban transportation is a much lower-cost way to go when you do your overall accounting — at least, that is my firm belief, I'd like to ask the minister if that is his belief and if there are any studies in the works to qualify this kind of intuitive feeling that we have.

Next I would congratulate the minister on his general approach to the acceptance of growth by municipalities around the province. It's a policy that I have long been arguing for. In other words, the incentive which one gives to municipalities to accept each additional new housing unit is the receipt of a grant of X dollars. In ideal circumstances, they now receive $1,000 from the federal government and $ 500 from the provincial government. That probably becomes roughly a balance on the new costs of a municipality of accepting a new dwelling unit, and this has been one of the problems over the years.

City fathers have looked at the question and said: "Well, now here's to be a new block of housing, but that's going to cost us money. It's going to cost taxpayers money in terms of schools and roads and all the other amenities that have to be provided, and therefore, on a net basis, the more people who come to our city the more it costs our existing taxpayers." This kind of grant system, this kind of up-front money, does a great deal to change the mind of municipal councils in that regard.

So I congratulate the minister on that direction, as I say, but I would ask him further if he has available now, or will put underway, any studies to once again quantify this intuitive direction. How much does it really cost a municipal district to receive a new dwelling unit and a new family, and are the existing grants sufficient to cover those costs?

Parenthetically, Mr. Chairman, I would hope that on this same line the minister would be in negotiation with his federal counterpart to receive those same kind of growth grants for the province of British Columbia that we are giving to municipalities, because just as the municipalities have costs in receiving new people, so, too, does the province of British Columbia. Our burden of growth is far in excess of the average burden of growth borne by Canadians across this country generally.

Finally, Mr. Chairman, before I sit down at this point, a question based on something the minister said earlier. He thought that we would see a lot of rental units over the next year. I wonder if he could put a rough kind of number on that and what it might do to the vacancy rate by the end of the year. I appreciate there's a lot of hypothetical thinking in

[ Page 3220 ]

this, but has he some just very rough order of magnitude? It would be helpful to this House to know.

MR. NICOLSON: I'd like to ask a few more questions, and I'll try and keep things brief.

I believe that transit subsidies are still under the minister, and I'd like to know how much he's going to move in the area of rural transit subsidies. There was an intention to extend the Nelson transportation system into a Kootenay transit authority, and in fact the buses already have that designation painted on them and have had for some time. I'd like to know when a referendum could be anticipated so that we can start experimenting with the practicality of extending bus service out of the Nelson area and, hopefully, throughout the Kootenays.

Also I would like to know what intentions the minister has to implement the Audain report. There are so many recommendations and really I would have hoped, had I been minister, to act upon about 40 of the recommendations of the report.

I would say the thing I get the most concern from is the exit-fee problem. I have three letters right here, and there are others which I've received which deal with the exit-fee problems, particularly in the lower mainland area. There's a whole range of recommendations, and rather than repeat that which we've all read, I would like to have some indications from the minister — a little bit specifically, hopefully. But I don't want to give a shopping list of 30 or 40 items to which he might be expected to respond.

I'd also like to know what has been the final disposition of the Natal urban renewal project, and I would maybe save some time by saying that this is a thorny problem which I grappled with. I'll say now, from this side of the House, that I do believe that a great deal of the problem was, I think, the inability of some persons to recognize.... In the partnership — it's a three-way partnership, in some respects a four-way partnership, since Crowsnest Industries or Kaiser has one of the first options to purchase on that.

But in reaching an equitable settlement we were willing and made our intentions clear to the regional district who were actually the administrators. We were willing to go considerably in excess of — and I won't say how much in excess because there still might be negotiations going on — the D.P. Squarey and Associates appraisal. I would say that if the matter has not been resolved, then I would urge the minister to do what I was quite prepared to do, and that is to unilaterally settle with those few outstanding resident owners if they are still outstanding. Unilaterally settle with them; then make your peace with the rest of the partnership.

Really, from a humanitarian point of view, it doesn't matter if the thing is ever legally settled as long as the people who have property interests in there, particularly the resident owners who are just a handful, can be satisfied or at least given a fair offer. Then, if necessary, there will maybe still be hard cases and the necessity to proceed with expropriation.

But I would say that some of the frustrations I found were when the administration suddenly decided to cut off water to the area in the middle of winter. Actions like that weren't conducive to settling that thing.

I'd also like to know about the Hastings Street urban renewal project which was another thing which started before I was minister, before we were government, I believe. It goes back a long way. Has the relationship of Summerhill Development been satisfactorily eliminated? The last time I drove by, there was still a huge vacant lot — fine land tied up. In fact, I must confess that it was some time before this thing was even brought to my attention in the department. It's a long-neglected problem. So I'd like to know something about the disposition of that. Those are two urban renewal projects.

The matter of Pemco Holdings: I'd like to know how it is being used, how many mortgages and debentures are now held in the name of Pemco Holdings. Is it perfectly legal and can it be...? I was often urged to utilize it in this respect myself, but I don't think that it should be done without bringing it before the Legislature.

Another question I'd like to ask about is capital.... Well, two other questions. The whole programme which arises from Bill 49 and such. Would the minister give an undertaking to prepare some informational material which would outline some specific cases of how the programme would work? That is, assuming a $47,000 mortgage in Vancouver, or case No. 2, assuming a $45,000 mortgage in Victoria and maybe a $44,000 mortgage in Prince George, how would it operate if there was partial AHOP, partial or full AHOP, full AHOP with federal subsidy — say part of the federal subsidy, full federal subsidy? Then another breakdown of maybe part of the $750 provincial subsidy coming into play and full provincial subsidy coming into play.

How would these provincial subsidies phase out maybe in a typical example during the next four years? What I'm talking about here is probably going to take 16 different examples. How would it phase out the provincial subsidy, the federal subsidy? Then at the end of five years, what would be the capitalization and the new face value of the mortgage, because the subsidies in some of these cases will bring the mortgage in five years to a point where the mortgage will actually be more — the person will actually be owing slightly more — a reasonable amount more than what they actually undertook as a mortgage at the beginning. This is based on the assumption of continued inflation.

[ Page 3221 ]

I really think that that is something that we should have had when we were debating the bill, but I would hope that I can get an undertaking that such information could be given to the members of the House so they could better understand the ramifications of this. I've tried to work some examples out. I wouldn't want to quote what I've worked out because I'm sure that it's so complicated that it would be subject to error.

Finally, under the commitments from the federal government.... You gave me a section 15 figure. Of course, there are different parts of section 15. There's (e) . So the section 15 figure, which is rather large, was that all non-profit? Are there any commitments toward co-op housing or any budget or expectation for next year?

HON. MR. CURTIS: Mr. Chairman, I had better start answering some of these questions. Otherwise I'll become a little confused with all the scribbled notes that I've got.

First, for the hon. member for North Vancouver-Capilano (Mr. Gibson), I thank him for his kind remarks on a couple of points that fall within my jurisdiction.

The Burrard ferry system was subjected to the most critical analysis upon change of government, at the end of December and the first part of January, to determine if, in fact, it should be proceeded with. Obviously the decision, Mr. Chairman, was "yes, we go." A considerable public investment had gone into the project already, but quite apart from that we sensed that it was a system which with the type of land-based support to which the member referred would be a very vital link and would grow in importance over the next few years.

The member will know that in fact the original plan, I believe, spoke of eight vessels — ultimately eight. Two are under construction and they are now in the water. They were launched very quietly just a few days ago — quietly only because they're the type of vessel that still looks rather like an ugly duckling until further work is done.

MR. GIBSON: But they're floating?

HON. MR. CURTIS: They're floating. Yes, they're floating very well, I understand.

We would expect, subject always to the kinds of problems one encounters, that they will be in operation in mid-winter — December, January, more likely January of 1977.

We have tried to cooperate very closely with the city of North Vancouver in particular because of the impact on the North Shore and, to a lesser extent but still recognizing its importance, to co-ordinate with the city of Vancouver. I know that Mayor Phillips is particularly enthusiastic about the system.

We went specifically — I say we, that's the representatives of my department — to meet with North Vancouver city at a special meeting on a Saturday afternoon in their council chamber to review some of their concerns. I must say, Mr. Member, through you, Mr. Chairman, that that sort of dialogue did not take place under the former government, and that was to be regretted. Whatever North Vancouver city could learn about the Burrard ferry system in its infancy, in its early planning, it learned through the press or second-hand. I simply cannot and will not operate that way when dealing with a community where a major link such as this is about to be injected.

There are several components obviously — British Columbia Hydro, its transit operation, both the north shore and south shore. The city of North Vancouver is concerned about open space. I endorse that principle and we shall do whatever we can to ensure that not only is a ferry system provided but some public area right on the water adjacent to the ferry system is available for the use and enjoyment of individuals who find themselves on the North Shore or live on the North Shore.

I hope that the system will also prove to be something of a visitor attraction, I think that many youngsters in downtown Vancouver hotels will quickly convince their parents that they want to ride that, as perhaps you and I did, Mr. Member, when we first saw the ferry from Quebec to Levis.

MR. GIBSON: Cable cars.

HON. MR. CURTIS: They may well be our cable cars.

You mentioned Mr. Spratt. I'm sorry to report that Mr. Spratt is in hospital. This happened within the last couple of days. I hope that he recovers very quickly so he can carry on with the important liaison work there, co-ordinating with the city of Vancouver, the city of North Vancouver, to a lesser extent Greater Vancouver Regional District, and with B.C. Hydro transit division. Most recently, as a matter of fact, my views have gone to the chairman of British Columbia Hydro and also to the minister responsible, pointing out precisely the type of thing that we see as being necessary.

Hiring of the staff is underway now, the initial staff, so they can train on the model that Case Existological Services...where the vessel has been designed, and also train and work with the vessels as they are nearing completion,

AN HON. MEMBER: Is the delay broadly caused by the south terminal in Vancouver?

HON. MR. CURTIS: The member, Mr. Chairman, asks: "Is the delay caused by the south terminal?"

[ Page 3222 ]

It's really just a series of things. It's running a little later because I frankly put a hold on it for a short while until we examined the total system, as I indicated a few moments ago.

I must move on, Mr. Chairman.

Growth in urban areas: I would hope that with the encouragement of the Premier and the cooperation of other ministers we are breaking down whatever compartmentalization has existed in the provincial service in terms of one department to another. I don't think we can any longer afford to have that splendid isolation in various departments of government.

Certainly I am receiving and I hope that we are giving the closest kind of cooperation with the Minister of Environment (Hon. Mr. Nielsen) — particularly Lands branch — and the Minister of Highways (Hon. Mr. Fraser), which have a very significant comment to make on development in British Columbia, as the hon. member for North Vancouver (Mr. Gibson) would know.

Of course, I have a rather unique opportunity at the moment to ensure that the Departments of Housing and Municipal Affairs are functioning not as a single department — one department is not superior to the other — but they must mesh well together. I am very encouraged by the clearly evident degree of cooperation that has been established between the two deputies, as an example, the assistant deputies and other senior people who are in both departments and are finding that.

Indeed, I notice it in my own office, Mr. Member. When a delegation comes to discuss Municipal Affairs, inevitably there is going to be a housing matter on the agenda or the reverse. So we are attempting to the very best of our ability to ensure that these two departments plus others are pulling together.

There is a land strategy policy being developed for each community. We are conducting an inventory of Crown land suitable for residential development. I don't think that will come as any surprise to the committee; that has been announced previously.

Jobs and housing: you spoke of livable region; why not a livable province plan? Well, the indications are that that is going to take a little while to work out. But we do see some encouraging signs. Under section 21 5 (a) we anticipate an application soon from Surrey for Port Kells industrial land to be tied into servicing adjacent residential land. We will offer all the encouragement that we possibly can when a community or a region is interested in pursuing that particular approach. Then you went back, Mr. Member, to transit planning. With the permission of the committee I would just like to move away from the Greater Vancouver Regional District and touch on transit generally. I will take only a few moments to do it.

Mr. Chairman, for whatever reason, the fact remains that upon assuming office I found, and this government found, a most unfortunate lack of cooperation and consultation between the various components involved in transit or public transport — the moving of people by whatever means might be under consideration.

Again, there was this compartmentalization and an attitude, almost, of competitiveness. This extended into the bureau of transit in the Department of Municipal Affairs. I suppose elements of it were found in the transit division of British Columbia Hydro and the other companies which had been acquired by the former government all sort of working for the same people — that is, the public of British Columbia — but not being encouraged to get together.

It was for this reason that I brought in Mr. Ken Smith as a consultant — not as an expert in transit, because that was not the indicated requirement, but rather someone who understood the workings of government and its agencies and could identify for cabinet and for me the breakdown in communication which had grown over a good number of years.

Mr. Smith is still serving in a consultant capacity and reporting on that regularly. His findings have been most helpful not only to the Department of Municipal Affairs but, I believe, to the government, because we simply cannot afford to have one sector doing this and another sector doing something else and occasionally a little bit of information moving back and forth more by accident rather than design.

The Greater Vancouver Regional District proposal on a transportation authority is a unilateral document that was presented to me about 10 days ago. I met with representatives of the GVRD, including Mayor Blair of Richmond, who is chairman of the transportation committee of the GVRD. I wouldn't describe the document as "leaked." They saw fit to release it in Vancouver. It states their point of view.

I don't take strenuous exception to the main thrust of the document. It can be argued in both ways that the Greater Vancouver Regional District is unique, but we also want ultimately to establish the kind of transportation authority which, with minor variation, would be as effective in Prince Rupert or Penticton as it is in greater Vancouver. Transportation problems in greater Vancouver are unique only in terms of scale, I would suggest. A smaller community with no bus service considers its problems to be very, very serious.

The financing formula has yet to be resolved. Certainly, though, I can assure the member and the committee, Mr. Chairman, through you, that we will want municipal — where appropriate — or regional district involvement not only in sharing the cost, but in making the decisions. I would not want to see a regional district simply provided with quarterly billings saying: "Okay, your bus service has cost X dollars and here's your share." We've not been

[ Page 3223 ]

involved in the planning — perhaps not on whether we go down First Avenue versus Second Avenue — but the planning, the type of service, the extent of the service...and then, as a natural follow-up to that, will be cost-sharing.

Next, Mr. Chairman, the member for Nelson-Creston spoke about rural transit subsidies. We expect that very shortly now we shall be able to give final dates for the implementation of service in the following communities, and these were identified as priority communities, I believe, both by the former government and certainly confirmed by this government, Not necessarily in order of importance, Mr. Chairman, they are: Prince Rupert, Trail, Kamloops, Kelowna, Penticton and Maple Ridge. Of all the communities interested in transit operations of one kind or another, that's where referendums have been held, where the community — the electorate — have said, "yes we want to go," and where we are in a position to proceed, hopefully as soon as possible.

I have issued instructions to the department, now that we've straightened out a number of questions and resolved several difficulties, to proceed with the implementation of bus service in those areas just as quickly as possible. Please don't ask me precisely when, but certainly in a matter of weeks or within the next quarter — the next three months.

The Natal urban renewal project in the regional district of East Kootenay, through you, Mr. Chairman: yes, it is a long-standing and a very thorny issue. I understand there are just about five or six resident-owners left now out of 28. The utility system is falling apart. The responsibility in terms of negotiation is primarily that of the regional district of East Kootenay. We have told that regional district board to proceed on the basis of the agreement made earlier and I am most hopeful that that matter can be finally resolved. I'd like to close the file on it. I'm sure the member for Nelson-Creston, while he was minister, would have liked to have closed the file on it as well. It goes back seven years, eight years, or more.

The Audain report, Mr. Chairman, is under review by several departments of government concerned, particularly Housing, obviously, and the Department of Consumer Services. I've had considerable assistance and interest shown by the hon. Minister of Consumer Services (Hon. Mr. Mair) .

We have in draft form a mobile home registry Act, It is not being presented in the drying days of this session but will be perhaps circulated as a working paper, as a white paper, or something along that line, in order that the community, the public at large, can examine the proposals. Clearly, out of all the recommendations, that is one which requires the earliest possible attention. The municipalities, I trust, in British Columbia will be pleased to know that some form of registry is under consideration.

The member for Nelson-Creston asked about Panco Holdings. I am informed....

MR. NICOLSON: How about the exit-fee problem?

MR. CURTIS: Well, I zeroed in on the mobile home registry, but exit fees, along with a number of other problems, are under review not only by this department but by the Department of Consumer Services. We first of all resolved whether it was a consumer good or a vehicle or a home, and we settled that pretty quickly.

As for Pemco Holdings, to the best of my knowledge, nothing is being held by Pemco. It has been empty and the member will know that it is now known as the B.C. Housing Corp. established for the purpose initially — and that's all that's happening at this point — of receiving funds from the federal government. Debentures are in the course of preparation and we will have our first money towards the end of July, I believe. We saw Pemco as sitting idle and believed that converting it to B.C. Housing Corp. for this federal relationship would be particularly helpful.

The member for Nelson-Creston also spoke about AHOP examples. Brochures have been prepared, and we will be happy to provide all members of the House, Mr. Chairman, with as much material as we can. We do find, however, that there are so many variations that to list them all would be more confusing than of help. We're prepared to look at those rather unusual ones on an individual basis, and assist wherever possible. But the supporting material, in terms of print and so on, is available.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, I'd like to touch on one or two points that haven't been mentioned so far. Initially, in the municipal field, I know the minister has commented that the assessment commission is expected to report by the end of July. I want to make it very plain, Mr. Chairman, that despite the claims of the former government and this government, the taxpayers of Oak Bay, in regard to property, are most unhappy. They believed that the NDP and then the Socred government were going to, at least in stages, reduce the cost of education tax on property. They've had a very rude awakening in this first session of the Social Credit government.

While I realize that this minister has no direct control over the budgeting set by school boards, it would be very wrong if we let this debate go by without conveying to the minister the deep sense of both concern and betrayal that many people in Oak Bay feel in regard to the fact that here in this first session of the Social Credit government the property tax in a place like Oak Bay has gone up something in

[ Page 3224 ]

the order of 20 per cent. Admittedly, two-thirds of the increase is education tax increase, but I've had many contacts by letter and telephone from the homeowners in Oak Bay who just cannot see how, if this kind of escalation of property tax is to continue year by year, they can continue to live in their homes. Even in my own particular case — I'm not a person who's looking for the next dollar — my taxes are up by almost $300 in one year on my home. I want to make it clear that it is not just a person who has a comfortable income that I'm talking about. There are many people in the municipality who are very distressed at this year's property tax increase.

I'm getting calls and letters saying that if inflation on prices and wages is supposed to be limited at 10 per cent, some of the property owners in Oak Bay have decided that they'll send a 10 per cent increase into the municipality. When or if they propose to pay the rest I don't know, but there's quite a movement afoot, I understand, by taxpayers who wish to demonstrate their sense of betrayal that everybody else seems to be tied to a 10 per cent wage increase or thereabouts, but the provincial government and the municipalities and the school boards seem to be able to set any kind of an increase that they find appropriate. It seems to be a double standard. The person on a fixed income, whether it be Mincome or other pensions, or a person employed in a job where she or he has to bargain through the union — they're tied down to 10 per cent, but when it comes down to receiving your property tax bill, it's a completely different situation.

I know the minister can't solve all that in any hurry, but I do want to get the message over very loud and clear that the continuing escalation of property taxes has to be modified in some way — presumably by a very critical analysis of the report that finally emanates from the assessment commission.

I would ask the minister in his deliberations in cabinet and elsewhere to look even further. We have to ask if the municipalities, somehow or other by legislative change, have to take some control over the cost of education. I know this may sound rather radical. We've always felt the tremendous importance of autonomy in the education field, but more and more I'm encountering the individual in my riding who says: "Enough is enough." There is very deep concern, this year in particular, that two-thirds of the property tax increase is related to the cost of education. Everybody but the educator says: "Well, I can't do anything about it. That's the school board — district 61 has that authority and that autonomy." I agree that is the case, but what I'm saying is that in this overall review that the assessment commission is doing and that the minister and his department are doing, I think we have to start looking at whether or not the present ground rules can continue, where the complete and total autonomy to decide the cost of education resides at the present time purely in the hands of the elected school board officials.

I wanted to try and clear up another issue, Mr. Chairman, that erupted at the public accounts committee two or three weeks ago. There was some very clear divergence of facts and figures in relation to the purchase of the....

MR. CHAIRMAN: Order, please, Hon. Member. May I just remind the member that details of discussions in public accounts are not fair game for this committee. I'm sure that the hon. member is aware.

MR. WALLACE: There are statements that appeared in the press, Mr. Chairman, which, very briefly, revealed probably what the minister has already acknowledged in debate this morning — that there was a very definite balkanization of authority. Statements were made as to the high cost of purchasing the trolley buses and high cost of having purchased a streetcar from a German company to see if it could be some kind of model for development of transit services in the lower mainland. I don't want to go into great detail, but so much taxpayers' money is involved that I would like to get the truth. I'd like to have the real facts and figures revealed in this particular committee debate, which seems to be the most appropriate place at which to get the truth.

The prices which were stated by Hydro were said to be highly inflated. Statements were made that the car couldn't even operate on the track — the wheels were too small, the wheels were too narrow, and the car would topple on curves. The minister subsequently made a statement to the press that the vehicle certainly could operate over railway trackage, but there would be a considerable outlay of something on the order of $100,000 to set up two temporary stations and to carry out the study.

The minister also said that perhaps the city of Edmonton, which already had such cars, might be making a bid on the particular one that had been purchased by the NDP government. I wonder if the minister could tell the House if in fact a bid has been received. I think with the trouble that's been taken to find out about this vehicle, we surely must be at the point where we're either very happy to sell it to Edmonton, or alternatively, if it holds any hope for being a suitable vehicle in the lower mainland, we should know what plans the minister has to develop it for that purpose.

The minister has said that he wants to co-ordinate all the transit activities and have the various arms of his department functioning in harmony. I wonder on that basis if he's suggesting any definite reorganization of the whole transit department and the composition of the transit bureau, because

[ Page 3225 ]

without reflecting on the statements made elsewhere other than in the House there certainly was, if not a competitive, almost an aggressive approach by certain voices from the echelons of Hydro in relation to the way in which transit previously functioned and the way in which decisions were taken in isolation. I wonder if the minister's got some specific suggestions as to how he's about to correct that.

Quickly, with regard to ferries and the Burrard ferries, I'm just surprised that some consideration has not been given to a complete integration of all transportation of citizens by boat. We now have three ferry systems: we've got the B.C. ferries under the Minister of Transport and Communications; we've got the Burrard ferries under this minister; and we've got ferries under the Minister of Highways. One of the strong planks in this government's election platform was that it would be an efficient, businesslike government. It would seem to me that we have a three-level administration of ferries in the province.

While this is an enormous subject in itself, and I've no wish to have a prolonged debate, I wonder if the minister, in conjunction with the Minister of Transport and Communications and the Minister of Highways, has in fact looked at the possibility of having any passengers that are moved by ship integrated within one form of ferry service. It seems to me there must inevitably be an increase in the bureaucracy and an overlapping of functions which could well be tied in for all the services that involve the movement of either vehicles and/or passengers by ship.

I'm not aware of the details of how such a bureaucracy can be minimized, but I have learned that already four top management positions have been advertised to deal with just the Burrard ferry crossing. While I am not in any way trying to minimize the importance of having efficient administration, I wonder if the minister.... I can see that you're occupied for the moment. But I understand that general manager, operations manager, engineering superintendent and marine superintendent — these four top posts have all been advertised. I presume we have similar top posts in B.C. Ferries, and I imagine that in the Department of Highways there are many senior men. I haven't the figures for their salaries available right now, but I just begin to think that when you add all that up and they are three different groups....

MR. CHAIRMAN: Hon. Members, could we have just a little lower noise level, please, out of courtesy to the speaker?

MR. WALLACE: Thank you, Mr. Chairman. I won't belabour that, but I wonder if the minister could comment on the potential to minimize the number of top senior positions that would be necessary if the three ferry arms were tied together. There may be reasons why this can't be done, but at a time when we're talking about big government — trying to minimize big government and minimize the size of Crown corporations — it would seem to me that here's an area where we might tie something into what is ultimately a smaller unit.

Very quickly on some of the housing questions: I realize that the minister has a problem over the continuing decisions on the Mt. Stephen site, but I do want to ask the question...or at least I wish to agree, first of all, with his premise that he cannot make a windfall profit available to a private developer. But all the advertising and all the lip service we give to housing in this chamber is to make housing available at the lower possible unit cost.

It was my understanding, for example, that in Prince George the municipality years ago acquired land and has subsequently made lots available at slightly less cost than they perhaps could otherwise realize if they wanted to put it in at the full competitive price — the concept being that if their lots were slightly less than market value, then this would drive down the cost of other lots provided by other private owners.

Now that seems a pretty logical approach, and since the government's stated objective is the lowest unit cost possible — in other words, affordable housing — I wonder why the minister could not make the Mt. Stephen site available at the initial price to Dunhill Development on the understanding that Dunhill would not use the up-to-date price in calculating the land cost, and consequently should surely be able to put a unit on the market which is the lowest possible cost attainable.

There's no question that if this is not done, then the minister only has two options — either sell the land back to the city of Victoria, or make it available to private developers in competition and charge the current market value. But in the long run, if you go that route, whoever finally buys the units or rents the units is certainly going to be paying a higher price than is necessary. It seems to me that the government here has an opportunity, through the vehicle it acquired — namely, Dunhill — to try and provide a lower unit cost on whatever project is finally placed on that site than will be the case if the full current price for the land is charged.

The minister's housing report, which was tabled yesterday, is interesting in one or two respects, Mr. Chairman. On page 21 the minister deals with home-conversion mortgage loans and points out: "Rigid municipal zoning and building bylaws were major obstacles and only 43 applications for the loans were approved in 1975." This is just a drop in the bucket, and maybe not even that. Again, without going into all the details, I wonder if the minister in some quick general way could tell us what he intends

[ Page 3226 ]

to do to try and overcome or legislate ways in which some of these applications can be increased in number and expedited in the manner in which they are processed.

The minister also comments on page 20 regarding leased land. Another platform of the Social Credit government in the last provincial election was to provide leased land with an option to purchase after five or eight years or whatever. I notice in this report that was tabled yesterday that on page 20 the minister mentions that there are 99-year leases and 60-year leases. I wonder what plans, if any, we can expect in the near future which would seem to meet the commitment the government made encouraging ownership rather than the leasing of land.

In other words, does the government have some plans to provide leased land with an option to purchase, which was a very integral part of their election platform?

One of the last points I just want to make in regard to Housing is another statement that was made by the president of Dunhill, where he said that municipal red tape adds 20 per cent to the price of a house and $5,000 to the price of a lot and that only very few municipalities are prepared to accept medium-density and high-density projects. I think in this area we're getting into the same kind of thinking that I mentioned in regard to education costs a few minutes ago. The municipalities can't have their cake and eat it, Mr. Chairman. The municipalities want autonomy, and that would be just great if they can look beyond the specific parochial limits of their own specific municipality.

I know I'm not winning any municipal friends when I say this, but the more I read about the problems of housing and the problems of municipal financing and so on, each little empire just seems to be able to focus its attention only on its own self-interest.

The schools and the school boards quite naturally want the best possible education for our children. So do we. The municipalities want the highest quality housing and the best possible circumstances with lots of open space and all kinds of frills. It seems to me that much as I'm opposed to Big Daddy government, if we allow the present trends to continue in these two particular examples I have taken, the problems of accommodating our urban population become enormous and the problems of paying for the cost of education by the homeowner will also become equally impossible.

I'm just wondering in these two particular examples I've chosen whether the minister, for example, might be contemplating some kind of conference with municipal representatives and school board representatives and provincial government to look at some of the issues that I've tried to raise very quickly in relation to these problems of municipal development and paying for the cost of education, particularly if it's to be based so clearly on taxes paid by the homeowner.

The statement by the president of Dunhill was quite emphatic and quite clear cut. He pointed out that the same problems pertain in other cities, not only Victoria and Vancouver, but he quoted Edmonton and Calgary. Again, I would just ask the minister: has he got any specific ideas as to the way in which the municipal red tape can be cut and ways in which municipalities will find it more financially attractive to accept medium-density and high-density housing?

I realize that this government has embarked on a progressive policy of trying to share tax revenue from other sources with the municipalities and that that's probably a year down the road. I'm not expecting the minister to give us a detailed outline of that policy. But I am certainly acutely conscious and aware of the anxiety by homeowners in urban municipalities such as Oak Bay that the present tax situation cannot continue. The possibility of being able to stay in your own homes seems even to people on what were once considered to be very comfortable incomes a bigger and bigger problem.

The last question, Mr. Chairman, is rather a large area to cover, but it is the question of the minister's role in continuing discussions within the government on what is a case with enormous precedent, which I am sure is of enormous interest to you, Mr. Chairman.

I hate to butt into your little conversation. But I'm talking about the precedent-setting situation which is about to be decided in Chilliwack....

HON. R.H. McCLELLAND (Minister of Health): We were just talking about Chilliwack.

MR. WALLACE: It is the question of the municipality which is continuing to grow at 6 per cent per year and which has made the crucial appeal to cabinet that the only way it can expand is by using somewhere in the neighbourhood of 1,720 acres of farmland. The reason I raise this, just quickly, in this particular debate is simply because municipalities all through the lower mainland and the Fraser Valley in particular must be sitting just waiting with bated breath to find out how this particular first challenge to the basic concept of the Land Act is going to be handled. While again I don't expect the minister to know what the government decision will be, I wonder if the....

MR. NICOLSON: A point of order. Mr. Chairman, it's obvious that the hon. member for Oak Bay is canvassing matters way outside of the duties of the Minister of Municipal Affairs and Housing — on the Land Commission — and that's already been

[ Page 3227 ]

discussed.

MR. CHAIRMAN: Thank you for drawing it to my attention. I've heard no protest at all from the minister involved, but please maintain relevancy in your debate, if you would, Mr. Member.

MR. WALLACE: Yes, Mr. Chairman, I always try very hard to do that in this House.

I'm talking about the problems facing municipalities where the population of the municipality continues to grow and where that population has to be housed and where the immediate land neighbouring on the boundary of the existing municipality happens to be agricultural land.

I think that it is a primary responsibility of the Minister of Municipal Affairs to be intimately involved in the discussions and, hopefully, to be able to give the municipal leaders and the particular aldermen most acutely worried about this problem some indication, for example, that if the expansion is to occur on higher land, which is perhaps class 6, then what about the substantially increased costs of developing in these areas? How does one balance off the overall provincial policy of putting land to its best possible use?

I don't think that, frankly, is breaking the rules of debate. I am just simply saying that we needn't run away from the fact that this particular decision that the cabinet are faced with right now will be one of historic precedence, because if, in fact, the decision is to allow this land to be used for housing, then that simply opens the door to a whole series of similar applications which I'm sure the minister is well aware of will be coming his way, or will be coming the way of cabinet in the future. I just wonder if he would care to comment in general terms on that problem.

MRS. E.E. DAILLY (Burnaby North): I have a brief topic I wish to bring up which I don't think the minister has discussed yet today, although I think the question was broached to him. It's in the area of co-op housing. I simply want to point something out to the minister and then ask the question.

First of all, as he knows, the former government was committed to giving leadership and financial assistance in the area of co-op housing for a number of reasons, because a great number of our citizens believe in the philosophy of the co-op housing. As a government, we were very pleased, under the former Minister of Housing (Mr. Nicolson), to encourage this, because primarily what is very appealing is the non-profit feature of co-op housing. When you get a group of people who are willing to go into co-op housing knowing that it is on a non-profit basis, we believe they should be encouraged.

In Burnaby, as the hon. minister knows, we've had a number of co-op housing projects which have been, I think, by and large successful. My concern is that since the minister has assumed office, and following a number of policy decisions made in this area, it is becoming apparent that this government, the Social Credit government, doesn't have the same commitment, to encourage co-op housing in this province, and yet thousands of our citizens wish to have the opportunity to go into co-op housing.

In the particular area of Burnaby which the minister is well familiar with, the Norman Bethune project, I understand a decision has been made to allow some co-op housing to go on. When I say allow, it's with the assistance of the provincial government, but not entirely. Part of it will be co-op housing and the rest will not be. It will be straight selling of the areas built and not on the co-op basis.

My question to the hon. minister is: what is your government's policy on co-op housing, and why has the Norman Bethune project in North Burnaby been restricted, I believe, to roughly 80 units for co-op housing in the new expansion?

MR. BARBER: Mr. Chairman, racing to meet our unspoken deadline, I wonder if the minister would care to wear his Municipal Affairs hat for a moment. I have seven questions that I should like to put to him, but I am mindful of the silent agreement of which the Chairman has no knowledge.

I am concerned about thef land-use contracts. I am concerned about section 702 (a) (3) of the Municipal Act, which has granted to municipal councils the authority to enter into land-use contracts with developers. It has granted those councils the opportunity to vary zoning bylaws within certain limits and, in effect, to bargain for extras that may come their way.

The problem, Mr. Chairman, is this: land-use contracts have come to be used so frequently and in some cases, if I may say it, so mindlessly that they have been very substantially abused. They have been used in effect to implement spot zoning, which is a very backward step and which is a contradiction of the purpose for which land-use contracts were conceived in the original case.

I wonder whether or not, in my first question, the minister would consider an examination through his department of abuses of land-use contracts and whether or not he might consider at perhaps the fall session of this House amending the Act further to be a little more specific, to be a little more directive, in the employ to which land-use contracts can be put. I think the minister does acknowledge, as many people acknowledge, that they have been abused, that they have been an excuse for permitting, in effect, spot zoning. They have, in a number of instances, done real harm to the community or neighbourhood plans that may be developed in various of the municipalities in British Columbia.

[ Page 3228 ]

My second topic that I should like to raise is the question of heritage building preservation. At the moment, municipalities have no authority under the Municipal Act whatever to refuse demolition permits. This is a very serious omission. It was one that concerned me when our government was in power; it's one that concerns me now that the minister opposite is in office. The city of Victoria has made three very specific requests. These requests include an amendment to the Municipal Act which would give the councils the power to withhold, at least temporarily, demolition permits in order to obtain, perhaps, alternate financing, to make changes to the rules, or generally to come up with a better plan for the preservation of heritage houses and sites in their jurisdictions.

They have secondly requested that the registrar of lands be permitted to enter heritage designations against property titles in order that anyone searching titles — anyone concerned about a specific property — should be able to understand from the outset whether or not he is dealing with a heritage site or property. I wonder if the minister would be willing to consider going through his cabinet to implement that particular recommendation. It seems to me a very small and very sensible means of determining what sites are heritage and what are not — what buildings should be preserved and which need not be.

The third proposal made by the city of Victoria, which I wonder whether or not the minister would also discuss, is the possibility of giving municipal councils in a very limited and careful way, in effect the power to expropriate heritage buildings where it is clear that through neglect, through abuse, the developer is allowing a heritage building to fall apart in order that he shall finally be able to turn around and say: "Now that my building has collapsed about my ears, can I tear it down and put a 40-storey highrise in its place?"

If the minister acknowledges that problem, would he consider an amendment to the Municipal Act to give councils the authority, when that situation presents itself, to in effect expropriate that building, to in effect counter the move that a sneaky or rascally developer might make to allow his heritage building to fall apart in order to put something on the site which is not consistent with the goals of that municipal council?

The specific one, though, of concern regarding demolition permits is really a very urgent one, and the minister is well aware of it. In Victoria we have lost a number of buildings in the last year because the municipal council had no power under the Act to refuse a demolition permit. I wonder if he might be willing, perhaps even through the extraordinary device of an order-in-council, to grant in some fashion as quickly as possible that authority to at least temporarily — perhaps for a period of 60 or 90 days — grant municipal councils the power to withhold demolition permits. Otherwise, these guys have no choice. They have literally no choice in the matter but to permit McClure house after McClure house after McClure house, Rattenbury houses and buildings throughout the province, to be torn down. They can't stop it; they just have no power at all to stop it. It is most unfair.

The third point that I would like to raise is the question of land speculation and the profits that result from it. As the minister knows — and it has been raised in the House on two previous occasions; he has promised a policy statement, and perhaps today we'll get it — the Canadian delegation to Habitat proposed, and many of the nations at Habitat recently agreed, that unearned profits as the result of land speculation should be subject to a 100 per cent tax.

The minister also knows that if someone earning welfare for a year, without doing any work to get it, makes $6,000, shall we say, hues and cries — cries of anguish and bitterness — arise throughout the province. Someone sitting on his butt for six months or 12 months earning $3,000 or $6,000 is properly criticized throughout the province. If a developer sits on his butt for a year and earns $60,000 because through inflation the price of his land has increased by $60,000, everyone thinks he is a great businessman. The fact is that both people have sat on their butts for a year and done nothing. One of them is in receipt of welfare, and in receipt of criticism. The other owns property which through inflation has increased wildly in value, and through the result of the non-work of that speculator has increased in value tremendously.

I was on a television programme on Friday night last. It might interest the minister that I was appearing on that programme with a member of the Social Credit Party who, to my great surprise and delight, agreed that unearned profits — the results of land speculation — should be taxed 100 per cent. That person agreed that 100 per cent taxation would be a fair and reasonable way of dealing with unearned land speculation profits. The member of the Social Credit Party who made that statement, by the way, is a director of the Social Credit Party responsible for Vancouver Island and Mackenzie area. He is a good friend of the member for Saanich and the Islands (Hon. Mr. Curtis) and past-president of the Saanich and the Islands Constituency Association, Mr. Bud Mesher. I know he's a good friend of the minister, he has told me so often.

He told the people of Victoria on Friday night on television that he personally agrees, and he felt many members of his party did, with the position that unearned land speculation profits should be taxed in the amount of 100 per cent so that, indeed, we kill the speculators from the beginning. Habitat has said

[ Page 3229 ]

that; the Canadian government in its position paper said that. I hope it's something that the minister comes to say.

Next I would like to raise the question of regional districts. This year, 1976, marks, roughly, the 10th year that regional districts have been in existence in a serious way in the province of British Columbia. I wonder if the minister would be willing to consider appointing some kind of commission of inquiry to re-examine the fundamental terms of reference, operations and procedures of regional districts.

When they were first brought in by the previous Social Credit government, the minister of the day announced — and I've read his own remarks, at least as they were available through the press, Hansard not being in existence then — that regional districts were in a sense experimental in nature. They were certainly experimental in origin, and the minister of that day said: "We're going to try a few models. We're going to try a few programmes. We're going to try a few different means of exploring the nature of regional districts."

Well, 10 years have passed, Mr. Chairman, and it seems to me that this year would be an appropriate time to re-examine, to restudy and to rethink the nature of the duties, the roles, the preferences, the powers and the obligations of regional districts in British Columbia. We're moving into the 21st century and I think it would be most worthwhile if we engaged in that kind of study. I hope very much that the minister would consider authorizing it under his own jurisdiction as Minister of Municipal Affairs.

The next point I wish to raise is the question of the authority, or lack of it, of regional districts to act in a positive way when questions like the Triangle Mountain development come up. Once again we find that divided authority in a divided house is present. We find that the Capital Regional District of Victoria is very concerned about a proposal by private developers for Triangle Mountain, a proposal which calls for the creation of a subdivision on that.

The chairman of the regional board has been quoted as saying that the board's hands are tied as long as the Highways department can approve subdivisions without substantial reference to the regional board. It might be part of a proposed study of the powers of the regional boards and regional districts or it might be part of the minister's consultation with the Minister of Highways to determine whether or not the Department of Highways should any longer have that substantial power and, if it should have such power, whether or not regional districts themselves should be granted the right of consultation before a Department of Highways approves a subdivision.

Obviously the department is well within the law in doing what they've done at Triangle Mountain. Obviously the Capital Regional District is not very happy with the fact that they have no power whatever to intervene, no power whatever to influence opinions and no power whatever to take action. I think that it would be fair and reasonable for the minister to consider the possibility that regional districts should, at least as a matter of law and course, be consulted before such subdivisions are permitted to occur.

I just have a couple of more matters I'd like to raise.

AN HON. MEMBER: Can you table them?

MR. BARBER: In the district of Sooke, the minister recently authorized a referendum which he knew and we knew was going to fail. In fact, it was defeated by a five-to-one majority. We knew and he knew it was going to fail because no one wanted it, save a small clique of merchants, save a small number of people associated with the chamber of commerce and the Social Credit Party in Sooke. The vote was defeated by five to one. The vote was unnecessary.

I'd like to know who asked for that vote, who wanted the vote to be taken, What interests did those people represent and with what degree of seriousness did the minister view their claim that a vote this time might likely pass? Anyone familiar with the area, even the member for Esquimalt (Mr. Kahl), could have told the minister it was going to flop. It flopped five to one. The voters defeated it. It was a totally unnecessary vote. I'd like to know how much that vote cost the taxpayers of British Columbia and how much that unnecessary vote was really required and who requested that unnecessary vote. I wonder if the minister could perhaps provide us with the names and addresses. An amusing correspondence might result if he did.

In Kamloops recently, concerned with the same matter, the minister rejected a proposal by Kamloops council that the 12 aldermen and the mayor be elected through a ward or semi-ward procedure. The letters patent of the city could have been amended to permit that. The minister chose not to amend it.

According to Kamloops council the questionnaire submitted to residents of the Kamloops area, at least those who could be bothered to reply to it, was more than 70 per cent in favour of ward or semi-ward election procedures....

AN HON. MEMBER: A straw vote.

MR. BARBER: A straw vote, that's right. It wasn't an official referendum. Now as the minister knows, under section 53 (b) of the Municipal Act, he does have the authority to permit a ward system. section 53 (b) clearly allows the minister to permit ward voting. I'd like to know on what basis the minister refused that and on what basis the minister forms

[ Page 3230 ]

policy and whether or not he intends in the future to permit any ward system of voting throughout the province of British Columbia. He does have the power within the Act already. I'd like to know whether or not he ever intends to exercise that power.

The final matter that I'd like to bring to him — with six minutes left — as Minister of Municipal Affairs...

HON. MR. GARDOM: You've got about five now. (Laughter.)

MR. BARBER: ...racing to the deadline, is the question of revenue-sharing. The minister has on four occasions in this House informed us that it's under serious study at the moment. The minister at that time earlier, in these debates, was unable or perhaps unwilling to provide a deadline.

Now as the minister knows, I wrote personally to the mayor of every city, town and village in British Columbia, and I wrote personally to the chairman of every regional district in the province. I received dozens upon dozens of letters in reply, and consistent in all of them was the concern about revenue-sharing, and consistent in many of them was a request that we press the minister to find out what deadline he has employed and what time-table he's working with for the presentation of a report which examines the several systems of revenue-sharing, the several different choices that he might make.

There is considerable urgency. The dozens and dozens of letters I've received compel me to believe that urgency is really at hand. I wonder if the minister could at least tell us whether or not by the end of this calendar year or this fiscal year, or perhaps at the Legislature in the fall, he might be able to make public these proposals.

Responsible members of municipal councils and regional districts throughout British Columbia want to be able to provide for proper revenue-sharing as it can be anticipated in next year's budget. They would like to be able to study it this fall, and any commitment the minister might make toward a time-table, toward a deadline, would be enormously helpful to them. Those are the seven final questions that I raise with the minister.

HON. MR. CURTIS: Mr. Chairman, I appreciate the comments that have been made by the several speakers on the opposition side of the House. I find myself in a difficult position of wanting to answer in the fullest possible detail and perhaps not being able to, due to the time constraints.

The member for Oak Bay talked about property tax increases, and I want to assure him that I am very concerned about the increase — not only in Oak Bay but in a number of British Columbia communities. He correctly identified the main offender, if you will, as the education portion of the tax bill. I believe that my information is correct. On an average in greater Vancouver the increase this year was about 9 mills — 8 of which were directly attributable to education. So we've identified the villain. Now we have to find a way of removing the villain from the stage. That frankly will involve discussions among my colleagues, Mr. Chairman, and I don't believe that I can comment further on that now.

If nothing else this morning, Mr. Chairman, I hope I can convince members of the committee to no longer refer to the light rail vehicle which is presently resting in New Westminster as a streetcar. It is not. It is a light rail vehicle and, while it may look like a streetcar, it has a number of characteristics which distinguish it from the ordinary streetcar that we've come to know. The NDP, for a variety of reasons, spent about $238,000 in bringing the vehicle to British Columbia from Europe. Built into that figure also, of course, are the unloading charges and a number of other related matters.

We've not had a bid, Mr. Member. Rather we have had an inquiry from Edmonton. I believe we've had one from the United States. I simply state again that, as I have outside this House, the purchase of the vehicle was horribly premature. There was no point at all in bringing the vehicle here at this time. I also had to make the decision and recommend to my colleagues that I was not prepared to spend about $100,000 of public funds for a short test track which would have been in operation for a few weeks on the Central Park Line in Burnaby.

MR. G.V. LAUK (Vancouver Centre): You have no imagination.

HON. MR. CURTIS: I've a great deal of imagination, Mr. Member, through you, Mr. Chairman. I hope that rather than just buying vehicles willy-nilly around the world we can get down to business and work with the Greater Vancouver Regional District and with other agencies in moving particularly metro Vancouver along the route, along the rail, if you will, towards the light rail vehicle. But you put your plan in place long before you go out and buy those vehicles.

The member for Oak Bay also spoke about reorganization of transit in general and the fact that there are now three ferry systems. Well, I think it should be pointed out, through you, Mr. Chairman, that this is essentially a seagoing bus. It's not a question of "Two other ministers have their ferry systems; I want my ferry system." But it's so directly related to transit — to land transit. In fact, it has been suggested that the vessels could be known as Sea Bus — Sea Bus I and II. It leaves me rather cold.

But it's a side-loading vessel,400 passengers on and off, very quickly, no smoking and no food

[ Page 3231 ]

service. I don't think we're getting into another bureaucracy or a duplication, because the people being engaged now — it's a very small group, for one thing — are going to be based on and for that particular system. It has to be very carefully tied in with British Columbia Hydro transit and with whatever in the Greater Vancouver Regional District.

MR. LAUK: May I draw your attention to the clock?

HON. MR. CURTIS: Mr. Lauk talks about the clock, but I would like to talk about Mount Stephen. We've gone through this before, Mr. Member, through you, Mr. Chairman. The difference is that in Prince George the city has been able to set the market. I'm going to Prince George in a very few days to have another look at what they've been doing, and I'm particularly interested in what they're doing. Here we're not in control of the market. The market is in control of us in the Mount Stephen specific.

MR. LAUK: Will you table the rest?

HON. MR. CURTIS: Chilliwack — the Environmental Land Use Committee will examine that and I have no further comment. Then we have the heritage....

All members of the committee, Mr. Chairman, seem to want to get through my estimates. I've been waiting a long time too.

I will undertake, Mr. Chairman, for the second member for Victoria, to review all the heritage matters. Perhaps after the session, since we're both here, we could discuss this in detail and where appropriate I could make recommendations through the Department of Municipal Affairs. I would be happy to do that.

MR. BARBER: Demolition permits?

HON. MR. CURTIS: Demolition permits — really, I don't think we can break out one specific, but I will look at it with you. That is an undertaking.

Regional districts: yes, I think the time has arrived to re-examine the fundamental terms of reference of regional districts. I am concerned, and I believe that a number of people are concerned, about the increasing hostility towards regional district government. I hope that regional district people themselves, both the senior staff and the elected directors, are cognizant of this increasing hostility — this feeling that here is yet another level of government and, by George, this one is growing faster than the provincial or municipal ones.

There's a lot of unrest with respect to regional districts out there, and if I can do nothing else in these few moments, I'll identify for regional districts that they should examine very, very carefully themselves what issues and what problems are causing that hostility, because they are at the bottom of the popularity poll in many parts of British Columbia right now, and either they correct that situation themselves or the province will correct it for them, speaking very frankly.

Kamloops and the ward system: I am philosophically opposed to a ward system, except in very unusual circumstances. The size of the city of Kamloops is such that I believe it can be served by a central council elected at large, and, in addition, the size of the council itself I felt was unreasonably large for a community which is not that significant in terms of total population.

Revenue sharing: my target is, with fingers crossed, 1977 — that is, immediately after this session I am going to sit down with my staff and identify the priority problems that both departments have — Housing and Municipal Affairs. We are looking for a revenue-sharing programme to be in place, given approvals and doing all the work, by 1977.

1 have really skated over all the stuff, Mr. Chairman. I would like to have taken longer.

MR. BARBER: Sooke?

MR. CHAIRMAN: Order, please.

HON. MR. CURTIS: Sooke: I don't think that it is a waste of time or dollars when there is a demonstrated interest, in voting on something such as incorporation, to go to a vote. The matter has been resolved; it was decisively defeated. That's fine. Fair enough. There seemed to be strong interest on the part of individuals in the community. The matter now, as far as I am concerned, is at rest for a good long time. They have made their decision and voted on it.

MR. R.E. SKELLY (Alberni): One short question, Mr. Chairman. I don't think the question of the Sooke vote has been resolved. There were some citizens, apparently, who suggested that they did have an interest in an incorporation vote out there, but apparently a very small number of citizens. A committee was struck by the chamber of commerce in Sooke to look into the idea of incorporation, and that committee then proceeded to almost dissociate itself with the chamber of commerce and proceeded in making political contact, according to the chamber of commerce, with members of the Social Credit government. The second member for Victoria asked who those members were, these people who made political contact with the government. What number of people petitioned the government to hold an incorporation vote to set up a municipality in Sooke?

Looking back at the Sooke Mirror of June, 1976,

[ Page 3232 ]

the chamber of commerce complained, they were upset that their committee on incorporation should have made political contact, and should not have gone ahead advocating a date for a vote on the matter of recommended incorporation without getting the support of the chamber. So the chamber did not support an incorporation vote in Sooke at the time it was held.

In another article in the Sooke Mirror of June 16, 19 76: "Overheard at the last incorporation workshop: 'Hey, there's the local Social Credit caucus.' " I am wondering just who the people were who approached the minister to hold that incorporation vote in Sooke. How many people? Who were they? Who were the people who established political contact with the Minister of Municipal Affairs without having the backing of the chamber of commerce and local groups in the Sooke-Jordan River area?

HON. MR. CURTIS: As I recall, there was no "political contact." A number of votes on incorporation or amalgamation are in various states of preparation now in British Columbia. There was one in your constituency the other day, Mr. Chairman, for Chilliwack and Chilliwack township — also one in Okanagan Falls and so on.

It seems to me — and I don't have names available — that there was, again, a demonstrated interest on the part of some individuals to study the incorporation of Sooke into a district municipality. Now I respond to that as I would respond whenever I experience a demonstrated interest in that sort of decision. Really, it's interesting that you would raise it in this way. There was a restructuring committee: my department examined the proposal; we decided on the date of June 22; the vote was held. The vote was rejected. Fair enough — the matter is closed, as far as I'm concerned.

Vote 142 approved.

Vote 143: deputy minister's office, $197,928 — approved.

Vote 144: administrative services, $275,252 — approved.

Vote 145: financial management, $291,564 — approved.

Vote 146: planning services, $487,432 — approved.

On vote 147: Islands Trust, $195,000.

MR. BARBER: Vote 147, Mr. Chairman, has the effect of reducing from $236,000 to $195,000 the funds available to the Islands Trust. My question is very simple. Does the Islands Trust have a future? If so, what is it? What is the minister's personal position on the role and responsibility of the Islands Trust in safeguarding that quite remarkable heritage which we uniquely possess on the west coast of North America — the Gulf Islands themselves? I was over there as recently as Sunday and was reminded once again of how extraordinary it is that that particular miracle should be here in the Gulf of Georgia. The Islands Trust is at the moment the only instrument presently available for safeguarding it. I want to know what the minister's policy is towards the Islands Trust corporately.

HON. MR. CURTIS: Mr. Chairman, not facetiously at all, the Islands Trust is still in place six months after the change of government. That should be of some reassurance to the second member for Victoria. But again, I'm concerned about the sort of thing we discussed with the member for Oak Bay (Mr. Wallace), and that is duplication and unpopularity. The Islands Trust should also look to its degree of acceptance and popularity among the residents of the Gulf Islands. The vote is there. The island Trust is in place for this year, 1976-77, at any rate. I have not reached any conclusion with respect to what I might recommend to my colleagues for 1977 and beyond. If anything — I emphasize that, as I wouldn't want the member to read into that that it may be shut down — I would like to consider the democratization of the Islands Trust and that is perhaps the election of trustees at large, but that also has to be examined pretty carefully.

The reason the budget was cut was that I, along with many other ministers, was asked to examine every possible area, understandably so with the situation in which we found ourselves, and we felt that the trust could function, and indeed the first few months have proven that it can, with a budget of $195,000 instead of $236,000. It's as simple as that.

MR. WALLACE: Very briefly, I just wonder if the trustees themselves made any formal recent representation to the minister, either seeking for any clear-cut change of direction or amendments to the existing Act. In other words, while there have been comments raised in public and some comments by the minister that the matter of how the trust is functioning should perhaps be reviewed, has the minister been approached in any specific or documented way by the trustees themselves?

HON. MR. CURTIS: Mr. Chairman, I met with the general trustees on a number of occasions. I think that it would be accurate to say that they understood that on my priority lists for the first six months of government and with a session coming up, the Islands

[ Page 3233 ]

Trust was not a major item for urgent, immediate action. I would assume that following the conclusion of this session they will want to meet with me. I will be happy to meet with them.

Vote 147 approved.

Vote 148: transit management services, $2,752,428 — approved.

Vote 149: transit demand programme, $324,568 — approved.

Vote 150: transit supply programme, $15,104,620 — approved.

Vote 151: grants and subsidies, $125,877,000 — approved.

ESTIMATES: DEPARTMENT OF HOUSING

On vote 108: minister's office, $22,400.

MR. WALLACE: Mr. Chairman, I notice the staff in the minister's office has decreased from nine to one. I presume that he's using staff in the Department of Municipal Affairs, but that's a very abrupt change of allocation of staff. I would like to know if that is the fact, that all the people that were previously working under the minister's office in Housing are now being used from Municipal Affairs. Is there an addition of eight people to the Municipal Affairs department? I can't find them in the Municipal Affairs vote. I understand that Mr. Gary Begg was hired as a special consultant to the minister. Yet in this vote 108 there's no allowance for a special consultant.

HON. MR. CURTIS: Mr. Chairman, we have combined the two departments in my office only. There are seven persons, including myself, in the minister's office. They are paid largely through Municipal Affairs, that is correct.

With reference to Mr. Begg, if I could catch up just a little later, I'll find out where that money is.

Out of general administration, I am informed.

Vote 108 approved.

On vote 109: general administration, $2,981,269.

MR. WALLACE: Again, a brief question. Maybe the minister means that some of the people listed under general administration are really in the minister's office, but the top appointments in this vote look very top-heavy. For example, there are two new positions as programme manager 5, and each is paid $30,900 a year. I'd like to know what was the necessity for the two programme managers at that high salary. If you count up the deputy minister, associate deputy minister and all the programme managers, Mr. Chairman, the total salary bill is $642,210. Important as housing is, it seems to me that's a very top-heavy allocation of senior appointments, costing a great amount of money. In particular, as I said a moment ago, two new programme managers 5 at a cost of $30,900 each — could the minister explain why we need all these senior people?

HON. MR. CURTIS: Firstly, Mr. Chairman, none of these people under vote 109 are in my office. They are in the Department of Housing but not all of them are there — a number of appointments have not been made. As an example, we have one associate deputy minister; we are under complement. Mr. Bell is a recent appointee as deputy minister, and I'm sure he wants to discuss this with me as soon as other matters are out of the way. We have no programme manager 5 at the moment, and we do not have 11 programme managers 2. While the authorization is there, the positions are not filled.

MR. WALLACE: How many programme managers do you have, and why do you have three allocations for associate deputy ministers? If you've only got one, are you meaning to get another two? I don't like this vagueness in the debate. If you prepare a budget — and we've heard about how ministers have been told to cut expense to the bone.... Here we have goodness knows how many positions listed at high salaries, and the implication from the minister's answer is that they're not going to be filled. If they're not going to be filled, why are they in the budget in the first place?

HON. MR. CURTIS: Mr. Chairman, I think the hon. member for Oak Bay will understand that the budget sheets are prepared well in advance. You know, they are halfway through now, and they were prepared almost when I arrived in the minister's office. We have eight programme managers in total, and if circumstances change, I'm sorry. But if the positions are not filled, and are not all going to be filled, then the money simply will not be spent. It can be spent elsewhere, hopefully, at some time and may produce more housing as a result.

Vote 109 approved.

Vote 110: grants in aid of construction of homes for elderly citizens, $10 million — approved.

Vote 111: housing and development, $44,720,45 9 — approved.

[ Page 3234 ]

Vote 112: Home Acquisition Act, $16 million — approved.

ESTIMATES: DEPARTMENT OF TRANSPORT

AND COMMUNICATION

On vote 198: minister's office, $153,642.

MR. A.B. MACDONALD (Vancouver East): Is the minister going to make a statement?

Interjection.

MR. CHAIRMAN: I have recognized the first member for Vancouver East.

MR. MACDONALD: I yield to the minister if he intends to make a statement first.

Mr. Chairman, I start off by welcoming a new minister, but I'm a little concerned, during the change of guard here, that while it is not yet Christmastime I feel the minister is making some Christmas presents in the summer to people who don't need them. That does give me some concern.

I've got a few topics to raise. The one I would start off with is this question of a Christmas present made in April, which upsets me because I come from a Judaeo-Christian background....

AN HON. MEMBER: I thought you were a Scotsman.

Interjections.

MR. MACDONALD: Maybe I don't fall into either one of those two, eh? Not really.

HON. MR. GARDOM: You're the other side of Hadrian's Wall. (Laughter.)

MR. MACDONALD: I'd like the minister to tell me whether I'm correct in saying that the petroleum corporation held a meeting in April, at which he was present, and raised the rate of return of Westcoast Transmission on its rate base from 10 per cent to 10.5 per cent. I don't think that can be denied. But the effect of it during a period of inflation has to be of concern to the Legislature and to the people of B.C. I don't think it's been announced that this has happened, as it has in fact happened.

Westcoast Transmission, of course, is the big carrier that is owned about 48 per cent by Phillips Petroleum and 12 per cent by the B.C. government but has had a very, very healthy profit picture over the last two years, raising its rate of return on its base rate from 10 per cent to 10.5. The directors of that corporation are, of course, the Minister of Transport and Communications and the Minister of Mines (Hon. Mr. Waterland) plus other directors. Raising its rate of return from 10 per cent to 10.5 in a period of so-called restraint — it certainly is restraint for the people of the province of British Columbia — was to raise the corporate return to the shareholders of that company by about $2.5 million.

When we look at the facts of the profit picture of Westcoast Transmission we see figures like this. In 1972 when the NDP became government, Westcoast Transmission's dividend per share was 60 cents; in 1973, 75 cents; in 1974, $1.30; from 1974 to 1975 the dividend per share of Westcoast Transmission went from $1.30 to $1.80. The 1974 net income was $24,000,731; by 1975 that became $33,019,000, which is a profit increase of roughly 23 per cent. Why, then, would the minister, with that kind of a growing profit picture for Westcoast Transmission, sit down on the board of directors and increase the return on rate base of Westcoast Transmission from 10 percent to 10.5?

The members of the Legislature have suffered — I say this with sorrow — a reduction in their own salaries of 10 per cent. I just wonder why a company that is immensely profitable and is really in the position of being a public utility in B.C., since it is a carrier now and sells the gas and deducts its net return for the carrying cost and sends the rest to BCPC, should hand out such a bonanza, a Christmas gift, to the shareholders of Westcoast Transmission, which is largely a foreign-owned company which was making very, very healthy profits from 1974 to 1975.

Why were they given this Christmas present by a resolution of the board of directors of B.C. Petroleum Corp. In April of 1976 at a time where everywhere else the government was preaching restraint on everything except its own taxes and charges that it imposed? I think, Mr. Chairman, that we have here another example of where this government has been hard on people but soft on big business and has, in this case, just given a totally unnecessary bonanza to the shareholders of Westcoast Transmission.

Westcoast, of course, with that 10.5 on rate base, is announcing big plans to expand the pipeline system. Of course that is good, but what has to be borne in mind is that if they have a rate return of 10.5 per cent every dollar they spend on new pipelines and facilities adds to the net income available to shareholders. Even though the new pipelines and the pipeline into the Quasar gas fields will be the biggest of them all — I think it's over 80 miles which is planned to be constructed in the next five years — as they expand the pipeline system, of course, their rate base goes up. They may do that on borrowed capital but the equity return to the shareholders increases.

This was not a company deserving of an increase in a period of inflation, in a period of so-called restraint on the part of this government. Yet this is what

[ Page 3235 ]

happened in April at a board meeting. I'd like the minister to explain why he would increase that rate base in April.

HON. MR. DAVIS: Mr. Chairman, the allowed rate of return for Westcoast Transmission was increased, as the hon. member for Vancouver East has said, earlier this year from 10 per cent to 10.5 per cent. The main reason for this was the necessity of expanding very substantially the supply of natural gas available to consumers of British Columbia, an expansion not only of the pipeline system itself but also the development of substantial storage to look after tight situations in the wintertime.

Westcoast Transmission, in order to finance this very large programme — this large, new programme — needs an overall rate of return, and indeed a return on equity, somewhere near the rates of return permitted by the National Energy Board to other corporations similarly engaged in expanding and assuring the gas supply to Canadians and for export. Westcoast Transmission, like other utilities, like other operating companies nowadays, is facing a continual turnover of its debt and, as it raises new money by the sale of bonds, has to pay a higher rate of interest. It was essentially because of the much higher rate of interest which is required to float new bond issues that it was deemed necessary, or desirable, to increase the rate of return by 0.5 per cent — from 10 per cent to 10.5 per cent.

I might say, in answer to the hon. member, and indeed to allay some of the concern that might exist in other corners of the House, that the same staff, the same people who advised that member when he was the minister responsible for energy matters in the province, made that recommendation that the rate of return be increased from 10 per cent to 10.5 per cent.

[Mr. Rogers in the chair.]

In summary, then, Westcoast Transmission is engaged in a very large programme of expansion. It has to raise new money. Much of that money is debt money. It has to be raised in today's inflationary environment. Debt money costs a good deal more than the old debt money available to Westcoast Transmission, and it was therefore necessary, in order to maintain, to come somewhere near maintaining, the return of equity, to raise the rate base so that this additional cost — the cost of buying bond-type money — could be met.

I might, in closing, Mr. Chairman, say that our natural gas supply situation in British Columbia is still very precarious. We face several years at least in which we are likely to have great difficulty in meeting both the export contracts we have and the mounting demands of British Columbians for natural gas. We have to find new sources of supplies. Certainly we have to increase the deliverability in the wintertime of our gas supply. This is one of the reasons why British Columbia has to be interested in a resolution of the question of bringing Alaskan gas down to the United States. If we were able in any way to speed up that process, we might relieve some of the export demands which are now being placed, or which now continue to be placed, on our own B.C. gas reserves and we could reserve more of our own lower-cost gas for British Columbians. It is urgent that we expand our own supply so that we assure ourselves of being able to get through the winter months in the late 1970s and early 1980s.

It is urgent, and Westcoast Transmission needs the capital in order to carry out the expansion programme that is necessary to head off a very tight situation in the late '70s.

MR. MACDONALD: Mr. Chairman, on the last point about the gas supply, I'd just like to point out that the drilling season that I suppose is just over — it's been over a month or two — is the most successful in B.C.'s history. Sometimes, when some of the bottom lines go round the province and say that the NDP couldn't run a peanut stand, I wish they would add that we could run the natural gas fields because we had about 100 wells drilled this season, which was one of the best.

I hope the minister will not listen to some of the briefs that are being presented to the energy commission at the present time which say that you should get away with the incentive price. When we gave 35 cents on old gas we gave 15 cents off it with a hooker, and the hooker was you've got to spend the money. You had to get it into circulation in the province of B.C. in drilling and exploration, and if you didn't accept the hooker you didn't get your 15 cents.

I see that the oil industry, which seems to have the ear of this government, is determined to get rid of that hooker. I certainly hope the government won't allow that to happen because I know that's still before the energy commission. I think the incentive plan that was introduced under the NDP was one of the best things that happened in terms of innovation, and I wish the federal government would adopt the same thing so that when these oil companies get an increase in the price of a barrel of crude, or whatever it is, then they get it on condition that they reinvest those proceeds in Canada in drilling and exploration to replace the stock that is being depleted.

But coming back to the increase in the base, in the return to Westcoast Transmission, Mr. Chairman, I don't think the House can accept the minister's explanation at all. Certainly with an expansion of the gathering system and the pipeline system in the north and twinning the line here and there, looping it down to the coast to provide additional capacity, Westcoast

[ Page 3236 ]

is going to have to go out on the bond market and raise capital for this construction.

But what I'm talking about is a totally unnecessary Christmas gift in April to the shareholders of Westcoast Transmission, because this return goes to equity capital, eh? And when a company on the basis of 10 per cent return from 1974 to 1975 increases its net profits after taxes by 23.5 per cent, and the government looks at that.... I don't care who the advisers are. The government finally has to make the decision, as I had to do in some cases myself, and take it to cabinet.

But when, after that kind of increase, the government says it isn't good enough and increases that rate of return to the equity shareholders, I say that's a sellout and a ripoff of the public. If we are to make wage and price controls work in this country and hold labour down to 8 or 10 per cent, how can we justify a foreign company, basically Phillips Petroleum, making that kind of a return — 23 per cent gain in one year after taxes — and then say that it's not good enough and increase the rate of return for 1976?

I say the minister has been taken on this proposition, This was totally unnecessary. It's going to deplete the revenues of the province by about, in my calculation based on the base rate, about $2.5 million a year — not as big as some of the other things that have happened around this province such as the coal business. But there's $2.5 million per year which we have just simply given to the equity shareholders of Westcoast Transmission at a time when they've just increased their dividend rate from 60 cents four years ago, $1.30 a year ago, to $1.80.

That is allowing profiteering in what is basically a public utility, and I can't for one minute accept the minister's explanation that they couldn't raise borrowed capital, debenture capital, for the new gathering systems to be constructed before 1981. In fact, that pipeline construction was well underway six months ago. So, you know, I think that's a very black mark against the government and that $2.5 million should be in the public revenue of the province through the B.C. Petroleum Corp. and was a totally unnecessary gift to the shareholders of Westcoast Transmission.

Now, Mr. Chairman, maybe I should just say something about the crude pipeline and ask the minister a couple of questions about that. As I understand it, in terms of the northern tier crude pipeline from the Rupert-Kitimat area — I think Kitimat is the latest proposal of TransMountain — through to Tête Jaune Cache and then to Edmonton, that would be a very major project to carry Alaskan American oil across the top of B.C. There could be very serious problems in the unloading of that oil and transmitting it into pipelines at either Kitimat or Prince Rupert because of the.... Well, in the case of Kitimat, which is the more desirable port, it is nevertheless a long, narrow passage down Douglas Channel for the super-tankers, and therefore very dangerous for the ecology of the Kitimat area. And if it's Rupert, it's very dangerous in trying to take that oil from big tankers and transmit it into pipelines at Rupert. So you get that ecological problem in B.C. in order that we should carry not our own oil for our own markets but U.S. oil.

If you do that, I think there is no doubt, Mr. Chairman, that the very fine plan of Governor Dan Evans of Washington for a multipurpose port at Port Angeles to save the Straits of Georgia from the entry of tankers, big or small.... I think there is no doubt that if this northern tier thing is constructed by TransMountain, that port is down the drain, because there is no way it can sustain itself without the flow of Alaskan oil coming in through that way and then being piped through the Pacific northwest and into the central states of the United States in the north.

So we've killed the plan of Governor Evans if this plan goes ahead, and I understand the minister has indicated approval, at least tentative approval, of it. We've killed that port, and the result follows as night follows day. That tanker traffic will build up in the Straits of Georgia. It will be coming past Victoria. The tankers will be going past Victoria, with all the dangers inherent in that situation, and then proceeding on to Cherry Point and Ferndale where the four refineries are located.

Now I think it has been suggested that some of the supply for the refineries at Ferndale and Cherry Point might be unloaded at Rupert or Kitimat and then brought down the pipeline where it joins TransMountain, or would join it at Tête Jaune Cache and then come down the existing pipeline to Ferndale. But I would point out to the minister that you've got two problems if that's the solution.

First you've increased the cost very substantially because you have to pay for carrying charges, and you've probably increased the price of the barrel of crude oil by about $1 over what it would cost to bring it down by sea, and the major oil companies, which are very often licensed with foreign registrations, are certainly going to fight back.

The other problem is that the Alaska crude is not what the Cherry Point area refineries basically rely upon, because I think the refineries you've got there are Shell, Mobil, Texaco and Atlantic Richfield. The only modern refinery able to process the particular crude being produced at Prudhoe Bay is Atlantic Richfield. All of the others are the older-style refineries that refine crude that is offshore — from the Philippines, Indonesia and other parts of the world. So you're not going to solve the thing by saying: "Well, we'll bring the Alaska crude down the pipeline to Cherry Point and the tankers won't have to come through the Strait of Georgia," — and

[ Page 3237 ]

threaten the ecology of  this most beautiful part of British Columbia, in my opinion.

I would suggest, Mr. Chairman, that the government ought to take another look at this proposal for a northern pipeline and think of the danger, ecologically speaking, of oil spills that are almost inevitable in the Rupert-Kitimat area. Think of the danger if you have an increasing buildup of tanker traffic into the Strait of Georgia. Think of the danger to the fishing, the ecology of this whole Strait of Georgia area.

Now we've been successful in preventing oil drilling in the Strait of Georgia so far, but if you're going to allow big tankers — and some of them go up to 200,000 tons or 165,000 tons, and some are bigger than that — if those kinds of tankers, and the smaller ones too, are allowed to come through the Strait of Georgia, you're putting in hazard the future of the Strait of Georgia as we've known it for the last 200 years in this province.

So I would ask whether the minister has made a firm decision to support this northern tier pipeline to carry American crude to the central U.S. markets and a bit to Cherry Point. Has a firm government decision been made, or will the minister reconsider the very serious implications that are involved in this offer to transmit the American oil across B.C.?

HON. MR. DAVIS: Mr. Chairman, briefly on the two topics — Westcoast Transmission rate of return and an oil pipeline from Kitimat through to Edmonton. On the first, the rate of return was increased — that's the rate of return overall. It was increased from 10 per cent to 10.5 per cent. In our questioning of the officials who recommended the 10.5 per cent, we reassured ourselves that the rate of return on equity would not increase — it may in fact be somewhat lower. But the overall rate of return embraces not only your return on equity, but a return on debt. In order to compensate for the higher rates of interest on debt that Westcoast has to pay, it was deemed desirable to raise the overall rate of return to 10.5 per cent.

On the oil pipeline: there is no commitment at all to TransMountain or the other supporters of this oil pipeline project which sees Kitimat as a terminal receiving Alaskan oil for shipment via Edmonton and the interprovincial pipeline down to the U.S. middle west — principally Chicago, Minneapolis-St. Paul and so on. There's no commitment at all. There is an interest because there are several aspects of that development that could benefit British Columbia — could conceivably benefit British Columbia.

First, on the environmental side the major alternative project is to supply Chicago by a pipeline which originates perhaps in Port Angeles, or perhaps further into Puget Sound, and carries Alaskan oil across the northern tier states to Chicago. That is the alternative — and were that alternative to be built, then many times the volume of crude oil that has until now been scheduled to arrive in the Puget Sound-Juan de Fuca area would be transported into Port Angeles or into some other port in the Puget Sound area. That is the alternative project for supplying Chicago.

Obviously, if a project of that character were to go ahead, the waters in this area — in the general vicinity of Victoria and the Gulf Islands — would be subject to a much greater hazard environmentally than were the oil to be transported from Kitimat eastward through Edmonton. Anyway, there are pluses and there are minuses. There are some environmental hazards relative to bringing Alaskan crude oil into, say, Kitimat.

Kitimat, I am told, is preferable to a Prince Rupert terminal because oil around the Skeena River, especially around the estuary, could have a very unfavourable impact on the salmon runs and, generally speaking, on the flora and fauna in that area. The narrow channel running into Kitimat is not really much of an environmental hazard because it's an area that could be easily contained and, of course, those waters are very well protected from the ocean winds and waves.

Yes, the B.C. government is interested in the proposal. It would have to be convinced that it was environmentally safe. It would also have to be convinced that it could provide offshore oil at competitive prices to refineries in the province. If Canadian oil production continues to decline relative to Canadian needs, we may find ourselves, by 1980,1981 or 1982, exposed to a federal policy which says that like Montreal, the west coast should turn occasionally to offshore oil because Canadian supplies are not adequate. So a pipeline through to Edmonton from Kitimat which would permit us to take not just Alaskan oil but oil from any offshore source and bring it to Vancouver and the Pacific Northwest might have some advantages for it.

Finally, the point of view of Washington state is not as the member for Vancouver East inferred; it is one of considerable interest in the Kitimat-to-Edmonton pipeline because it might provide a way of bringing Alaskan oil to the existing refineries at Cherry Point, Anacortes, Ferndale and so on, via the TransMountain Oil pipeline. They have been supplied from Alberta. They could be supplies again by the TransMountain line and tankers thereby prevented from having to come in through the more confined waters in Puget Sound and the Gulf of Georgia.

There is certainly no commitment on the part of the B.C. government. We have received only one visit so far from those who are pushing for this pipeline. We have not received any substantial details, either economic or environmental, so far, and obviously this

[ Page 3238 ]

matter would have to be gone into very thoroughly before any permits or any indication of full-fledged support were given to the interested parties.

MR. MACDONALD: Mr. Chairman, I can't agree with the minister that the increase in the net return on rate base to Westcoast doesn't go into net income for shareholders. What they raise by way of borrowing debentures, of course, carries its own rate of interest and is paid off. But this is what is left over for the shareholders and, as their report points out, this is the annual report of Westcoast Transmission for 1975: "The company again achieved record levels in revenue and income in 1975." This is after paying off.

Interjection.

MR. MACDONALD: Yes, that's right. It's something we have to look at. This company was in a very healthy financial position when you met in April and increased their rate of return. It was not suffering. I have to admit that and it was something that we should have had a look at because it's basically a public carrier, a utility in the province of B.C. The report also says the company achieved record levels in revenue and income in 1975. Record! Their net income amounted to $23 million in 1975, a 23.5 per cent increase over the $26 million earned in 1974, and after providing for earned dividends, the income available to common shareholders increased to $29 million from the previous high of $25 million in 1974, and the dividend rate went up from $1.30 to $1.80 per share. That's a fat, healthy financial position of Westcoast Transmission. Somebody said that we were against business. Well, we certainly left Westcoast Transmission in a very healthy financial condition, but we did not expect that they would receive a delayed Christmas gift following the election of December 1975, and that's exactly what they have received and what they didn't need. It was money that should have gone to the people of B.C. It should have gone to B.C. Petroleum Corp. and not to the shareholders.

Interjection.

MR. MACDONALD: The member's tones are so dulcet and soft and sweet but I often can't pick up what he is saying.

Just to recapitulate on the northern tier pipeline proposal, of course Washington state will wonder whether or not this thing isn't a solution, too, but what they had proposed is definitely down the drain if you go ahead on this, and that is having a multipurpose port at Los Angeles. Then the big tankers make a wide sweep when they come down from Alaska, well outside of the B.C. coastline, they come in a bit in Puget Sound, but only to Port Angeles and there it's piped, safe from spills and damage within Georgia Strait.

The alternative is that the multipurpose port is not supported through B.C. policy and encouraged. There would be increasing tanker traffic into the Straits of Georgia, particularly as the supply of Canadian crude that is now going to Cherry Point is phased out by government policy that comes from Alberta.

So I suggest to the minister that it would be in our interests if the sound plans of Governor Dan Evans proceeded and he was not bailed out from having to go ahead with the multipurpose port by reason of us saying in a big-hearted way: "Well, we'll transport your American oil across the northern part of B.C. You won't have to worry about Port Angeles or the pipeline system into Cherry Point. It'll be at a higher cost." So I suggest that that is something that ought to be more seriously reviewed.

I think that the minister made a mistake in indicating any kind of tentative approval of this northern pipeline before these considerations were thoroughly considered by bodies such as the Energy Commission.

MR. GIBSON: Mr. Chairman, I welcome the minister's assurance to this House that the government has not as yet reached a conclusion to support the northern pipeline from Kitimat. I would ask him to tell his colleague, the Minister of Economic Development (Hon. Mr. Phillips) because, according to press reports, the Minister of Economic Development unequivocally assured the B.C. Chamber of Commerce meeting up in Penticton that the government was behind that project — supported it 100 per cent, hoped it would be built. So I think he should talk to his colleague.

The pipeline, as he said, has good potential but it's going to have to be very carefully studied. I'd be glad if the minister could tell the House now if in his opinion the existing TransMountain pipeline capacity through southern British Columbia and down into the Cherry Point-Anacortes area is sufficient to supply those refineries 100 per cent or if there would have to be some looping. I suspect there would be if it wouldn't be too consequential in nature.

But the important question I want to ask him about this particular oil pipeline proposal is: will the government undertake to hold public hearings before any final approval and go-ahead is given? I think that that is very important because the questions that have been raised here are of such a nature that public hearings should be held.

That is one question. My other question before lunch — I hope to discuss this more afterwards — relates to the Alaska Highway gas pipeline. The minister suggested that bringing Alaskan gas down the United States through the Alaska Highway route,

[ Page 3239 ]

which I think is a natural, would allow us to use more of our own lower-cost gas, as he put it, in British Columbia. The Alaskan gas would go through and supply the U.S. requirements that we're currently supplying, presumably.

But here is the question I have, Mr. Chairman: when he talks about our own lower-cost gas, that low-cost gas being exported to the United States is obtaining full market value — $2 a thousand — and it is making the Government of British Columbia profits of over $200 million a year. If that gas is displaced back into British Columbia, then one of two things must happen. Either we lose those profits, which hurts in terms of the revenue the government has to spend on social services, or else gas prices are raised substantially in British Columbia.

So now that the minister has brought up this subject of using more of our own lower-cost gas in British Columbia and if that Alaska Highway gas pipeline goes through, would he tell us which of the two things would happen? Would we, by keeping that gas in British Columbia and using it here, maintain low rates in British Columbia and therefore lose the revenue, or would we maintain the revenue and therefore tremendously increase the rates in British Columbia to natural gas users?

HON. MR. DAVIS: Mr. Chairman, in answer to the three questions asked by the hon. member for North Vancouver-Capilano: first, the existing capacity of the TransMountain oil pipeline, I believe, is adequate or close to adequate to meeting not only the present requirements of refineries in the U.S. — the Pacific Northwest to the south of Vancouver — but could look after some growth as well. I think the expanded requirements of those refineries over a period of, say, half a dozen years could be met with a minimum of investment.

In other words, we have the pipeline capacity in Canada to look after those refineries in Washington state if we have the oil, if we have Canadian oil or if, perhaps, there were a pipeline from Kitimat running to Edmonton or if Alaskan oil, alternatively, was available to flow down the TransMountain line past Kamloops, past Vancouver to the Pacific Northwest.

There is the question of public hearings relative to a new oil line across the north. I think almost certainly we would have public hearings. I would certainly hope — I would indeed expect — that the Energy Commission would be required to hold hearings into not only the economic but also the environmental and other aspects of a large-diameter oil pipeline from, say, Kitimat along the CNR route to Jasper and on to Edmonton. That pipeline has appeal at least to Canadians in the rest of the country and Americans because there is a great deal of excess pipeline capacity from Edmonton through to Chicago. All the rights-of-way are in place to service the existing refineries in the U.S. middle west.

So it is only a major project to the extent of the new pipe laid in British Columbia. It is not a major project east of the Rockies. So its economics rest largely on that and it's probably the cheapest way of getting a fairly large quantity of Alaskan oil to Chicago.

The Alcan project, the gas project, the project which would bring Alaskan gas down across the Yukon and northeastern British Columbia could relieve us to the extent that we want to be relieved of an export obligation to the U.S. Pacific Northwest.

Our problem really is this. By far the largest amount of gas produced in British Columbia has left British Columbia for the Pacific Northwest, and there is a very substantial contract that runs through to 1989. It runs through at a high level. Our own British Columbia requirements have grown and they're now becoming comparable in amount, but we don't have in prospect — immediate prospects anyway — any increase in production available to us. So something has to give or will have to give shortly.

If Alaskan gas could come in at the top end it could relieve us of some part of our export obligation. Of course, that would also relieve us of some of the income that we've been getting from that. I would expect that we would always, as a matter of public policy, have preferential prices for our B.C. gas for British Columbians, but unless we find more gas in British Columbia, large amounts of additional gas, we will face this, problem anyway of diminishing returns from export sales.

The House resumed; Mr. Speaker in the chair.

The committee, having reported resolution, was granted leave to sit again.

Hon. Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 1 p.m.